Perenna is creating a bank where mortgages will be funded by covered bonds, allowing them to create 30-year fixed rate mortgages and giving customers resilience by removing interest rate risk from their mortgage. Xcina Consulting has been assisting this future bank in several areas to build a resilient organisation and robust processes and systems which can be trusted. Here, Colin Bell, Co-founder and COO at Perenna, explains their journey.
Q1. Could you provide us with some background about Perenna before you started this journey with Xcina Consulting in February 2021? A: Whilst the idea was being formed earlier, the founders started working on the current banking application process in 2017 with the aim of creating the UK's first pure covered bond bank. We started by presenting the business plan to the regulators, obtaining funding and started building the team which now stands at around 40. We are well progressed in the application process and look to launch in 2022. Covered bond funding can be used for any type of mortgage but we see the UK as lacking in flexible long term fixed rate mortgages.
Q2. What convinced you to seek external advice? A: When setting up a new organisation, you have resource constraints and tight timescales. Using external consultants gives us the extra manpower needed for specific tasks. Since the first engagement the skillsets, knowledge, experience and delivery that Xcina brought was particularly good and therefore the management team decided to expand the mandate into other areas and the relationship has been very fruitful and productive. We achieved a lot in a short space of time, which would not have been feasible with the existing team alone, Appointing Xcina also allowed the existing team to focus on building the bank and obtaining the necessary banking licence which can be a difficult process, especially for a new organisation. They worked as an extension of our current team and company, rather than an arm's length external organisation. It's been fun at times, too, which has been great for our culture.
Q3 From a practical perspective, what were your top three objectives? A: We had a requirement to get things done quickly and efficiently, and needed the expertise and wider market knowledge which did not necessarily exist internally, at least in the early days. I. Gaining the banking licence II. Ensuring Perenna is resilient and sustainable when we are live. This is extremely important for us as a business, for the regulator, and fundamentally also for the customers we will be looking after, to ensure we have a long-term future as a bank. III. Delivering great products, a great service proposition which ultimately will lead to great customer satisfaction is at the heart of what we aim to do. We are trying to make mortgages more accessible and safer for consumers and deliver great customer experiences, removing the challenges people currently face.
Q4. How did you find the journey with Xcina Consulting? A: When we've approached Xcina with a piece of work, they very quickly provided very good scoping documents giving good visibility of costs, timescales and deliverables. The journey has been great, they always delivered to time and expectations, exceeding in terms of quality of output, which is why we have continued with further pieces of work with the team. It has been very positive and we're still on the journey.
Q5. What outcomes do you think have been the most valuable? A: The work we undertook with Xcina around IT controls, setting policies and standards was a very significant piece for our banking application. This was achieved in a very efficient manner and very short space of time. The collaboration between both sides got us to a good place, and we submitted all these documents to the regulators to plan. Drafting and bringing in wider knowledge are where Xcina really excelled. The other area was operational resilience. Again, there is a lot of effort involved in getting the right framework together, other organisations have had longer to do this but we're still working to the same tight timeline of March 2022. Xcina helped us in running the workshops within Perenna, producing output, putting things together, a really good piece of work. In terms of our governance, structures, policies, and procedures, we're in a good place with embedding those and that's certainly where Xcina has helped us.
Q6: Would you recommend Xcina Consulting to others? A: I have recommended Xcina, so that's the best endorsement you can get. Reason being is simple, they scope work well and deliver very well on time, on budget and to a high degree of quality. As I have said before, I view it as a partnership.
" When you are trying to obtain a banking licence, there is a great deal to do with limited resources. Tactically, we therefore brought in talented and experienced practitioners to maximise our efficiencies and harness expertise. Xcina have assisted us in several areas, including IT controls and operational resilience, which is core to building a sustainable bank and one which delivers for its customers throughout times. Lindsey and the team at Xcina have proven expertise and continue to be invaluable to Perenna, and we see them as part of our team." Colin Bell, Co-founder and COO at Perenna
That's a sign of a good consultancy business where you can feel they're almost part of the business rather than being an external consultant. That is how I have found everyone I have worked with at Xcina. I am recommending them, have recommended and will continue to do so. Q7. Other observations worth highlighting? A: Couple of things I've really enjoyed… around Operational Resilience and Outsourcing. Lindsey [Lindsey Domingo, Senior Director of Consulting and Regulatory Compliance Lead, Xcina] and I have had some interesting debates outside of the work, really because the regulations and changes are quite new. As with new things, some parts work well and some others don't work as well. We have had some really good chats and challenges about how we interpret certain things and what we should do in certain situations. These conversations have been outside of the project work and I've never seen it as being a consultancy thing. Lindsey has always been open and willing to discuss these things, and it's been really good. He is very approachable, as are the rest of the team. We've had some great debates about some of these new policies coming out, which is what happens when new things are put into place: not everything is necessarily right, not everything is as clear as you want it to be, in terms of interpretation, and some of it is quite subjective - so that's been really good.
Lindsey, Domingo, Senior Director, Xcina: Keep the questions coming! Colin: It's useful. We're both gaining knowledge from these debates. It's about being approachable. Whenever we have questions that need answers, you and the team are always available. Sometimes these things can be awkward when you deal with consultants, but it hasn't been that way with Xcina and as already mentioned it seems like an extension of our business rather than a third party.
